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Johnson Company has ten employees who have each accrued $2,700 in vacation benefits. What is the journal entry to record accrued vacation pay earned? O Vacation Benefits Payable 27,000 Vacation Benefits Expense O Vacation Benefits Payable Cash O Vacation Benefits Expense Cash O Vacation Benefits Expense Vacation Benefits Payable 2,700 2,700 27,000 27,000 2,700 2,700 27,000

Johnson Company has ten employees who have each accrued $2,700 in vacation benefits. What is the journal entry to record accrued vacation pay earned? O Vacation Benefits Payable 27,000 Vacation Benefits Expense O Vacation Benefits Payable Cash O Vacation Benefits Expense Cash O Vacation Benefits Expense Vacation Benefits Payable 2,700 2,700 27,000 27,000 2,700 2,700 27,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Example Journal Entry for Accrued Vacation Benefits** *Scenario:* Johnson Company has ten employees who have each accrued $2,700 in vacation benefits. The task is to determine the correct journal entry to record the accrued vacation pay earned. *Options:* 1. Debit: Vacation Benefits Payable $27,000 Credit: Vacation Benefits Expense $27,000 2. Debit: Vacation Benefits Payable $2,700 Credit: Cash $2,700 3. Debit: Vacation Benefits Expense $2,700 Credit: Cash $2,700 4. Debit: Vacation Benefits Expense $27,000 Credit: Vacation Benefits Payable $27,000 *Correct Journal Entry:* - The correct entry to record the accrued vacation pay is: - **Debit:** Vacation Benefits Expense $27,000 - **Credit:** Vacation Benefits Payable $27,000 *Explanation:* This entry reflects the total liability incurred by Johnson Company for the accrued vacation benefits, by increasing the Vacation Benefits Payable (a liability account) and recognizing the expense in Vacation Benefits Expense.
Transcribed Image Text:**Example Journal Entry for Accrued Vacation Benefits** *Scenario:* Johnson Company has ten employees who have each accrued $2,700 in vacation benefits. The task is to determine the correct journal entry to record the accrued vacation pay earned. *Options:* 1. Debit: Vacation Benefits Payable $27,000 Credit: Vacation Benefits Expense $27,000 2. Debit: Vacation Benefits Payable $2,700 Credit: Cash $2,700 3. Debit: Vacation Benefits Expense $2,700 Credit: Cash $2,700 4. Debit: Vacation Benefits Expense $27,000 Credit: Vacation Benefits Payable $27,000 *Correct Journal Entry:* - The correct entry to record the accrued vacation pay is: - **Debit:** Vacation Benefits Expense $27,000 - **Credit:** Vacation Benefits Payable $27,000 *Explanation:* This entry reflects the total liability incurred by Johnson Company for the accrued vacation benefits, by increasing the Vacation Benefits Payable (a liability account) and recognizing the expense in Vacation Benefits Expense.
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